{"id":49464,"date":"2022-06-14T00:13:12","date_gmt":"2022-06-14T00:13:12","guid":{"rendered":"https:\/\/harchi90.com\/dow-plunges-900-points-sp-enters-bear-market-as-inflation-fears-mount\/"},"modified":"2022-06-14T00:13:12","modified_gmt":"2022-06-14T00:13:12","slug":"dow-plunges-900-points-sp-enters-bear-market-as-inflation-fears-mount","status":"publish","type":"post","link":"https:\/\/harchi90.com\/dow-plunges-900-points-sp-enters-bear-market-as-inflation-fears-mount\/","title":{"rendered":"Dow plunges 900 points, S&#038;P enters bear market as inflation fears mount"},"content":{"rendered":"<div id=\"\">\n<p>Stocks in the US plunged Monday as investors digested a report last week showing that inflation in May surged at its <span class=\"link\">fastest pace in four decades<\/span>. <\/p>\n<p>The S&#038;P 500 tumbled 151 points, or nearly 4%, to close at 3,750.  The more than 21% drop since its most recent peak in January, puts the S&#038;P firmly in a <span class=\"link\">bear market<\/span>. <\/p>\n<p>Other benchmark indexes also sank sharply, with the Dow Jones Industrial Average dropping 876 points, or 2.8%, and the Nasdaq Composite dropping 4.7%. <\/p>\n<aside class=\"newsletter_signup \">\n<figure class=\"embed embed--type-newsletter-widget embed--float-none embed--size-large embed--type-iframe\" data-ads=\"{\" wordcount=\"\">\n<\/figure>\n<\/aside>\n<p>On Friday the S&#038;P 500 sank 2.9%, locking in its ninth losing week in the last 10. The US government&#8217;s report that inflation accelerated to 8.6% in May, from 8.3% the previous month, was taken to mean that the Federal Reserve will continue to raise interest rates, dashing investor hopes of cooling inflation.  <\/p>\n<p>&#8220;Friday&#8217;s CPI report was too hot to handle for US equity markets. The 40-year high print in annual inflation last month spoiled the peak inflation narrative and triggered a wave of selling pressure across risk assets,&#8221; Piper Sandler analysts said in a report.<\/p>\n<p>Cryptocurrency prices also slid, with bitcoin sliding to $ 23,981 &#8211; its lowest since December 2020, according to Bloomberg. <\/p>\n<p>&#8220;The brief window of hope that opened in the back half of May as it looked like US inflation \/ Fed tightening forecasts were hitting a peak and China was reopening has snapped violently shut, and investors are back to wallowing in a hole of despair following the huge CPI on Friday and the modest COVID setbacks in China, &#8220;analyst Adam Crisafulli, founder of Vital Knowledge, said in a note.<\/p>\n<figure class=\"embed embed--type-video embed--type-content_video is-video embed--float-none embed--size-medium \"><figcaption class=\"embed__caption-container\">\n<p>          <span class=\"embed__icon\"><br \/>\n            <svg viewbox=\"0 0 32 32\" aria-hidden=\"true\"><use xlink:href=\"#icon-video\"\/><\/svg><\/span><\/p>\n<p>          <span class=\"embed__headline\">El-Erian says inflation could hit 9%<\/span><\/p>\n<p>          <span class=\"embed__video-duration\">08:59<\/span><\/p>\n<\/figcaption><\/figure>\n<p>Allianz Chief Economic Adviser Mohamed El-Erian echoed concerns about inflation picking up steam.  &#8220;I think you&#8217;ve got to be very modest about what we know about this inflation process. And I fear that it&#8217;s still going to get worse, we may well get to 9% at this rate,&#8221; he said this weekend on CBS News &#8216;Face the Nation.<\/p>\n<h2>Inflation at the pump<\/h2>\n<p>Fierce inflation is taking a toll on consumers.  A University of Michigan index on Friday showed that consumer confidence fell to a 50-year low in early June.  Average gas prices <span class=\"link\">surged above $ 5 a gallon<\/span> for the first time ever this weekend, according to AAA. <\/p>\n<p>Americans typically drive more starting around Memorial Day, so demand is up.  Global oil prices are rising, compounded by sanctions against Russia, a leading oil producer, because of its war against Ukraine.  And there are limits on refining capacity in the United States because some refineries shut down during the pandemic.<\/p>\n<p>Federal Reserve officials are scheduled to meet this week for their policy meeting, and investors expect them to raise interest rates at least half a percentage point in a bid to rein in inflation.  Some Wall Street analysts think the pace of monetary tightening is likely to tip the economy into a recession.<\/p>\n<p>&#8220;With the recent inflation data providing no &#8216;clear and convincing evidence&#8217; that inflationary pressures will recede without stronger policy actions, the challenge for monetary policymakers of guiding inflation back to target without depressing demand to the point of triggering a recession has gotten that much more difficult, &#8220;analysts with Deutsche Bank told investors in a research note. <\/p>\n<p>&#8220;In our view, achieving such a &#8216;soft landing&#8217; looks very unlikely given the degree of monetary tightening needed to combat the seemingly endless stream of inflationary shocks and rising inflation expectations,&#8221; they added.<\/p>\n<p>Chris Beauchamp at IG, expressed similar doubts in a research note.<\/p>\n<p>&#8220;It&#8217;s still too early to say a recession is definitely coming in the US, but a &#8216;hard landing&#8217; seems very hard to avoid at this point given the way inflation is still rising,&#8221; the chief market analyst said. <\/p>\n<p>Mark Haefele, chief investment officer of global wealth management at UBS, has a more benign view.  He still expects inflation to dip later this year, noting that the price of products like smartphones and TVs have started to decline.  He notes that so-called core inflation, which excludes volatile food and energy prices, declined slightly in May even as the broader Consumer Price Index rose.<\/p>\n<p>    <!-- data-recirc-source=\"\" --><\/p>\n<aside class=\"component list recirculation component--type-recirculation \">\n<p><h3 class=\"component__title\">Trending News<\/h3>\n<\/p>\n<\/aside>\n<p><!-- tags -->\n  <\/div>\n","protected":false},"excerpt":{"rendered":"<p>Stocks in the US plunged Monday as investors digested a report last week showing that inflation in May surged at its fastest pace in four decades. The S&#038;P 500 tumbled 151 points, or nearly 4%, to close at 3,750. The more than 21% drop since its most recent peak in January, puts the S&#038;P firmly &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/harchi90.com\/dow-plunges-900-points-sp-enters-bear-market-as-inflation-fears-mount\/\"> <span class=\"screen-reader-text\">Dow plunges 900 points, S&#038;P enters bear market as inflation fears mount<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","spay_email":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[8],"tags":[],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"fifu_image_url":"https:\/\/assets3.cbsnewsstatic.com\/hub\/i\/r\/2022\/06\/08\/0bea30c2-5074-4569-9457-5760da95523a\/thumbnail\/1200x630\/fbcd6f14bc28e00f9aabdee77c88eb15\/download.jpg","_links":{"self":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/49464"}],"collection":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/comments?post=49464"}],"version-history":[{"count":0,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/49464\/revisions"}],"wp:attachment":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/media?parent=49464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/categories?post=49464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/tags?post=49464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}